I guess I have an untrained eye, but the picture looked pretty good in my eyes
I was able to use the h-fill mode and the picture fills up my entire screen without the loss of quality that ZOOM mode does
Does the IRE difference make the picture lighter or darker now?
Playing a commercial DVD on a international Panasonic and watching it through it's SD(composite or S-video) outputs it will be slightly dark.
Making a recording on a international Panasonic(from a standard +7.5 IRE N. American source(VCR, STB, DVR, etc.)) will look fine playing it back on the Panasonic(from it's SD outputs) but too light from it's HD(component and HDMI) outputs. It will also look a bit light if you take that DVD and play it in a standard N. American DVD player or computer.
It's kind of confusing but again the main point is playing DVDs made on a international(with a non darkened input) will produce DVDs with a IRE of +7.5 whereas they should be 0 IRE for black and that will look slightly light on standard DVD players.
As to your last point, I agree and if you can darken the input it makes it downright perfect